Type to search

China’s Lenovo Breaks Losing Run, Posts Revenue Growth

The Chinese PC-manufacturer has turned around five quarters of falling earnings that followed a boom in sales during Covid lockdowns

Lenovo equipment is seen as a security risk in the US.
An employee gestures next to a Lenovo logo at Lenovo Tech World in Beijing. Photo: Reuters


Lenovo, the world’s biggest maker of personal computers, posted better-than-expected earnings on Thursday, with revenue bouncing back to growth after five quarters of decline.

The Chinese firm said October-December revenue rose 3% from the same period a year prior to $15.72 billion. Analysts polled by LSEG estimated revenue to be flat at $15.25 billion.

Revenue started contracting in 2022 at the end of a boom in demand for PCs and other electronic products that had been brought about by movement restrictions during the pandemic. 

But after almost two years of decline, the market is showing signs of recovery, in part due to vendors clearing excess inventory.


Also on AF: US, EU Can’t Meet Climate Goals Without China’s Cheap Green Tech


Researcher Gartner in January reported Lenovo’s third-quarter PC shipments grew 3.2% versus the same period a year earlier. Industry-wide PC shipments likewise grew, by 0.3%.

Lenovo controlled 25.6% of the global PC market during the period, Gartner data showed, with HP, Dell and Apple in second, third and fourth place.

However, while Lenovo enjoyed an upturn in third-quarter revenue, profit dropped 23% to $337 million. Still, even that exceeded market expectations.

Lenovo’s share price rose after the earnings announcement and was up 3.27% in afternoon trade versus a 1.45% increase in the benchmark Hang Seng Index.

The firm saw revenue grow in most markets, however it plunged 10% at home in China. The drop “definitely reflects” challenges posed by slowdown in the world’s second-largest economy, said CEO Yang Yuanqing at an earnings briefing.

Still, investors have been buying Lenovo shares over the past 12 months in part due to expected demand for “AI PCs”, or personal computers optimised to run artificial intelligence (AI) software. In that time, Lenovo stock has gained more than 25%.


Lenovo-Nvidia Partnership

On Thursday, Lenovo said AI PCs – including those capable of running AI applications without being connected to the internet – will be a strategy focus for the foreseeable future. Last year, it unveiled more than 10 AI-capable PCs at the International Consumer Electronics Show.

AI PC shipments will likely reach 50 million units this year and are set to more than triple to 167 million units by 2027, accounting for close to 60% of total shipments, showed data from researcher IDC.

Lenovo is also set to benefit from being one of the technology industry’s big manufacturers of “AI servers”, or dedicated AI computers equipped with multiple processing chips developed by leading AI chipmakers such as Nvidia.

“The AI server [market] is expected to grow twice as fast as the [traditional] server market,” Yang said.

Lenovo has been a major partner of US chipmaker Nvidia, but as the United States bans exports of high-end AI chips to China to slow that country’s technological development, that partnership has come under investor spotlight.

Asked about the ability to source Nvidia’s AI chips, Yang said supply has been stable for Lenovo’s non-China business.


  • Reuters with additional editing by Sean O’Meara


Read more:

After Samsung, Lenovo Agrees to Feature Baidu’s AI Bot Ernie

Lenovo Pinning Hopes on ‘AI PC’ After 16% Revenue Hit

India to Permit Apple, Samsung, Lenovo to Import PCs, Tablets

China’s Lenovo Logs Revenue Hit as PC Demand Crashes

China’s Lenovo Sees Worst Quarterly Sales Since Early 2020



Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.


AF China Bond